Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Comstock Resources Earnings Conference Call. My name is Jennifer, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Jay Allison, President and CEO. Please proceed.

Miles Jay Allison

Thank you, Jennifer. And welcome to the Comstock Resources Third Quarter 2011 Financial and Operating Results Conference Call. You can view the slide presentation during or after this call by going to our website at www.comstockresources.com and clicking Presentations. There you'll find a presentation entitled Third Quarter 2011 Results.

I am Jay Allison, President of Comstock. And with me this morning is Roland Burns, our Chief Financial Officer; and Mark Williams, our Vice President of Operations. During this call, we will review our 2011 third quarter financial and operating results, update the results of our 2011 drilling program and discuss our plans for 2012.

Please refer to Slide 2 in our presentations. And note that our discussions today will include forward-looking statements within the meaning of securities laws. While we believe the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.

If you'll turn to Page 3 of the presentation, this is the 2011 third quarter highlights. Please refer to Page 3 of the presentation where we will summarize the third quarter results. We have improved our financial results this year despite weak natural gas prices by increasing production and lowering our operating cost. We reported revenues of $119 million, generated EBITDAX of $94 million and had operating cash flow of $86 million or $1.79 per share. The gain we recognized from selling some of our Stone Energy shares allowed us to make a slight profit this quarter of $1.3 million or $0.03 per share.

Our production increased 53% over the third quarter of last year and 8% over our strong second quarter. The Haynesville program is driving the production gains this year, as we have caught up on completions of wells we drilled in 2010, but were not completed due to the lack of frac services. We're very pleased with the results of our 2011 drilling program. This year, we drilled 67 successful wells, including 51 Haynesville shale wells and 12 Eagle Ford shale wells.

In the Eagle Ford, we have probed up our acreage in this oil-rich play and have increased our holdings to 28,000 net acres. Our dedicated completion crew started working in south Texas in the third quarter. We put 4 new Eagle Ford wells on production and are currently completing 5 more.

Our balance sheet continues to be very strong. We continue to have good liquidity and currently, have approximately $460 million in cash or marketable securities available borrowings on our credit facility. We will also talk about our preliminary plans for 2012 on this call, when we plan to fund our drilling program with operating cash flow to protect our strong balance sheet.

I'll turn it over to Ronald Burns to review the financial results for this quarter in more detail. Roland?

Roland O. Burns

Thanks, Jay. Slide 4 in the presentation shows our oil and gas production on a daily basis for the last 15 quarters, and it's broken out by operating region. Production from our Haynesville shale program is shown in blue on that chart.

In the third quarter this year, our production averaged 285 million cubic feet of natural gas equivalent per day, a 53% increase over the third quarter of last year and 8% higher than the production in the second quarter of this year. The production this quarter set a third consecutive new record high for us.

Haynesville production increased to 200 million per day, as compared to 176 million per day in the prior quarter. Production from our Cotton Valley wells decreased a little this quarter to 38 million a day, and we averaged 40 million in our south Texas region and 7 million in our other regions. Looking ahead, we believe our production will come in between 94 and 97 Bcfe in 2011, which represents a 28% to 32% growth over 2010's production.

During the fourth quarter, our completion crew worked primarily in our south Texas region and our Eagle Ford program and returns to the Haynesville in late December to complete 9 wells in a 10-well pad development project. As a result, we expect fourth quarter production to decline by about 2% to 4% from our high third quarter level and then increase substantially in the first quarter of 2012 when this project is put online.

Oil prices continue to be strong in the third quarter, which we cover on Slide 5. Our realized oil price increase 35% in the third quarter of 2011 to $87.50 per barrel, as compared to $64.97 per barrel in the third quarter of 2010. For the first 9 months of this year, our average oil price was $92.50, 39% higher than our average oil price of $66.54 for the same period in 2010. Our realized oil price in the third quarter has averaged 98% of the average benchmark NYMEX WTI price. We expect our oil price differential to improve in our Eagle Ford program as much as $5 a barrel based on new marketing arrangements we are making, as we've been able to capture some of the spread that exist between the WTI price in the Louisiana Gulf Coast market.